RJO Futures Website

November 24, 2015

Volume 9, Issue 24

Featured Article

Upcoming RJO Futures Webinars

Upcoming RJO Futures Webinars

Critical Trading Mistakes

Wed, Dec. 2, 2015 at 11 a.m. CT

Register now! Avoid the critical mistakes in this business of trading. Be a student of the markets and focus on mastering the basics of trading for profit while managing risk. Most amateurs take unlimited risks for limited gains, this is not a good business strategy. Learn from the mistakes that you make in the market and be persistent. Trading with a proven strategy can reduce these critical errors.

In this webinar you will learn:

  • How to think in probabilities
  • Find a proven strategy and believe in it
  • Predicting moves in the market, not chasing price
  • Managing the emotional roller coaster
  • Trading decisions based on facts, not guesswork 

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Metals - Gold

Gold Going to $1,000

In the early morning trade, February gold is up about $8 an ounce today and currently trading at $1,074.4. Gold is trying to find a near-term bottom, but will definitely have its challenges due to the rising dollar, deflationary talks from the Fed and a five week sell off from its October 15 high of $1192.1. Maybe it will find some support from the Russian fighter plane being shot down over Turkey and the possible tensions it will bring.

If we take a look at the daily chart, February gold is trying to find a bottom but is still looking very bearish for a further sell off. It is currently trading near its contract low for the year and is finally vulnerable to test that $1,000 an ounce handle. If you’re a gold bull, I wouldn’t buy this market unless it gets back above $1,100 an ounce.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 866-536-8601 or ndegeorge@rjofutures.com.


Feb '16 Gold Daily Chart
Source: RJO Futures PRO

Gold Daily

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Metals - Silver

Is Silver Finding a Bottom?

Silver has made new near-term lows, shooting down to 13855.  Seeing a 13 handle on the silver market definitely has some sticker shock attached to it.  However, the trading since the last eView looks more like a near-term bottoming than an aggressive move lower.  When silver is ready to move, look at the end of October until last week in November.  That’s what silver does when it wants to move.  The last week is silver looking to find a bottom. 

This week’s chart is a more zoomed in version, only going back to August.  It’s hard to fathom, but from the high of 1637 to 1385.5 that’s a roughly $13k move in this market since Oct 28.  While this market is whipping around the trading opportunities are still there.  To make a vague statement, the risk parameters are clearly defined for someone looking to get long OR short exposure in the market.  I’d like to see if the market can close above 1452 for a potential to rally back up to the 16 level.  Otherwise, an actual close below 14 could point to lower prices.  Vague, but we need the market to tell us what to do.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 866-536-8601 or mrataj@rjofutures.com.  


Dec '15 Silver Daily Chart
Source: RJO Futures PRO

Silver Daily

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Energies - Crude Oil

Political Situation in Middle East Major Factor on Crude Oil

RJO Futures Senior Market Strategist Mike Sabo discusses the crude oil futures market. Crude is trading up. Political situation in the Middle East a major factor on the market. Feel free to contact Mike here to leave a question or comment on his video.

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Energies - Natural Gas

Natural Gas Bleeds Lower with Other Energies

Despite some strong winter weather hitting parts of the Midwest this past weekend, natural gas prices have continued to slide to new lows. With warmer weather back on the forecast, there is very little fundamental optimism for natural gas bulls. Not only has the entire energy sector continued to struggle, but the recent strength from the U.S. dollar is likely to be contributing to this pressure.

Although the market appears to be highly oversold, the year-long trend has been so consistently bearish that many momentum indicators are surprisingly neutral. The Jan ‘16 natural gas daily chart posts an RSI of about 31 despite the market experiencing about a 37 cent sell off in the past seven sessions. Technical traders should make note that this extreme move has created some very clear bullish divergence between price and RSI (see included chart). If the RSI fails to catch up and fall lower in the very near future, a strong rally may ensue.

The closest level of major resistance appears to sit around $2.40/mmbtu. Be cautious as there is still an unfilled gap in between 2.59 and 2.623 from late-October. Ultimately, this gap should be filled before further downside momentum can be sustainable.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 866-741-0339 or aburton@rjofutures.com.


Jan '16 Natural Gas Daily Chart
Source: RJO Futures PRO

Natural Gas Daily

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Softs - Sugar

Sugar Impresses despite Strong Dollar, Weak Gold

Tony Cholly

Overbought conditions, but still facing a global deficit ahead.  The fact that sugar was able to grind out a moderate gain yesterday, in the face of negative outside markets and risk sentiment, indicates the underlying strength of its bullish supply outlook.  Even with a stronger dollar and weaker gold values, a positive close for a third session in a row is quite impressive.  The commitment of traders showed a hefty net-long position from speculators, but one that is still well below any “extreme”.  The fear of a global deficit of 3-5 million tonnes is growing and supporting the sugar market. 

Sugar looks to be heading up into new high ground as Brazilian and Indian supply problems are not going away anytime soon.  March sugar will find near-term support at 1502 with 1591 as next upside target.  Longer-term 1675 is not out of range.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-826-2270 or tcholly@fjofutures.com.  


Mar '16 Sugar Daily Chart
Source: RJO Futures PRO

Sugar Daily

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Softs - Cotton

Cotton Presses Lower End of Range

Cotton had trouble surpassing the 6355 level of resistance throughout the month of November and Monday’s sharp selloff has prices retesting range lows in the March contract.  The area from 6145 – 6175 has provided some decent structure throughout the last few months and will likely be an important zone of support to keep an eye on going forward.  If price action can remain above the 6145 low, then cotton will likely continue to digest within the current range, providing traders with choppy, digestive price movement.  Any sustained weakness below the 6145 support pivot opens the door to additional weakness down to the 6090 level, and perhaps a run at the September lows around 5945.  The market has been making relatively lower highs and lower lows since the July peak and, should this pattern continue, cotton may be vulnerable to further declines heading into the end of the year. 

If you have any questions or would like to discuss the markets further, please feel free to contact me at 866-397-8195 or etatje@rjofutures.com


Mar '16 Cotton Daily Chart
Source: RJO Futures PRO

Cotton Daily

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Softs - Cocoa

Holiday Trade

Peter Mooses

The recent pullback in cocoa was due to profit taking once the March contract broke above 3400 and a decline in demand out of Europe. The global markets have also added to the halt in the rally. 3301 was hit on November 23. Looking at the chart, you can still see the market is bullish. The market has been on a strong move up since October 12. Traders continue to buy or add to positions during pullbacks.

West Africa has seen a lot of rain as of late but the dry temps towards the end of August, early September may have already done its damage.

Technically, there is support at 3275 and resistance at 3350. During the U.S. holiday week we should see a lighter trade overall. By year’s end, I anticipate cocoa testing 3450 due to year end demand and the weather outlook.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-826-4124 or pmooses@rjofutures.com.  


Mar '16 Cocoa Daily Chart
Source: RJO Futures PRO

Cocoa Daily

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Softs - Coffee

Coffee Remains under Pressure

Adam Tuiaana

March coffee has bounced back from the mid-November lows to the 124 level again, pushing a continuation of the recent rally from last week. Keep in mind, however, that even if we see a continued run up above the 124 area, coffee prices have given back almost all gains from September and October. In addition, it’s reported by the Hightower Group that “record Vietnam crop” is in the works, thus adding continued pressure to March coffee and likely pushing prices to resume the downtrend that has been in place for quite some time.

A recent violation of the 117 level will likely prompt some follow-through selling and should lead to a revisit of the 115 area over the next week before any support is found. As for our position today, we will sound like a broken record and will weigh on the side of the trend, down.

There are several strategies that traders can apply in this situation. If you have any questions or would like to discuss the markets further, please feel free to contact me at 866-536-8601 or atuiaana@rjofutures.com.   


Mar '16 Coffee Daily Chart
Source: RJO Futures PRO

Coffee Daily

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Agriculture - Grains

Argentina Major Focus of the Grains

Stephen Davis

The corn market traded lower on a lack of fresh news ahead of the U.S. Thanksgiving holiday. There is some talk that the big increase in the USDA’s November stocks for China could be offset by significant decreased stocks in other world countries.

The soybean complex traded higher overnight when massive selling did not emerge after Argentina’s presidential election over the weekend. Argentina, back in the 1930’s, was the leading exporter of beef in the world. This year they are the ninth biggest. Change is in the air in Argentina and as they say, change is a good thing. While the true impact on grain/oilseed production and exports in Argentina is the election win by the opposition party’s Macri, there certainly is plenty of optimism in the country for consistently higher levels of both over the coming year. Corn exports from Argentina could rise as much as 44% over the next three years’ wheat exports could explode more than 50 % and soybean exports could rise more than 20%, according to a long time Argentine consultant.

Seasonally, it is the time of year where grain markets try to rally. Chinese soybean meal demand should explode higher as hog and poultry margins soar ahead of the Lunar New Year holiday early next year. There is a lot of grain in the world today but this will not last forever. The demographics of global population and income are in favor of the agriculture sector.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-367-7181 or sdavis@rjofutures.com.  Also be sure to check out my weekly grain market update posted on our website.


Soybean Weekly Continuation
Source: RJO Futures PRO

Soybean Weekly Continuation


Corn Weekly Continuation Chart
Source: RJO Futures PRO

Corn Weekly Continuation

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Agriculture - Livestock

Strong Dollar, Questionable Demand Still Point to Lower Prices

Cheap feed and adequate grazing conditions are contributing to a strong trend of building weights as seen in the recent COF report. Slaughter has not changed much YOY and needs to pick up to compete with other proteins.

Technically we touched just above the 125 support level in front month fed cattle I mentioned last blog. Technically the 117 level is the lower end of the value area and a move to 104-105 would be considered a washout area. Seasonals were long hogs/short cattle from the end of October through the week before Thanksgiving and reverse long live cattle/short hogs after Turkey Day into the Christmas holiday.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 888-861-0382 or jgilfillan@rjofutures.com. You may also follow me on Twitter @RJOJeffGil.


Live Cattle Weekly Chart
Source: GeckoSoftware.com

Live Cattle Weekly


Weekly Feeder Cattle Futures
Source: GeckoSoftware.com

Feeder Cattle Weekly


Long Feb '16/Short Dec '15 Live Cattle Futures
Source: GeckoSoftware.com

Live Cattle Spread

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Dec. Rate Hike Still on the Table

John Caruso

RJO Futures Senior Market Strategist John Caruso discusses currency futures markets. Economic data has been weak. Dollar is trading down, Euro is trading up. Still talk of a Dec. rate hike. Feel free to contact John here to leave a question or comment on his video.

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Outlook on the E-mini S&P

Greg Perlin

After an initial probe overnight, the E-mini S&P entered the U.S. trade with partially damaged charts. From a short-term perspective, the path of least resistance is pointing downward, especially with fresh terrorism warnings released from the U.S. State Department.   The 21-day moving average in the December E-mini S&P is just above the current market at 2074.35 and that level probably won’t present significant resistance.  On the other hand, there doesn’t appear to be much in the way of solid support until the 2064.00 level.  In the end, traders have to wonder if good U.S. data will be bad for stocks, or if bad U.S. data will be good for stocks.   GDP came out as expected this morning and the market showed little reaction.

If you have any questions or would like to discuss the markets further, please feel free to contact me at 800-826-2270 or gperlin@rjofutures.com.


Dec ‘15 E-Mini S&P Daily Chart
Source: RJO Futures PRO

E-Mini S&P Daily

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This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.


The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

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